Ray Dalio: "Principles: Life and Work" | Talks at Google

So thank you all for joining us. I would like to introduce you to Ray Dalio. He is the founder of Bridgewater Associates. He founded it in 1975 and it is one of the most successful hedge funds in history. So let's give Ray a nice welcome to Google. in a stage of my

life

as I am entering what I call the third stage of my

life

. I think that life exists in three major stages. The first is that you know that you are learning from others. You depend on others. You are a child, the second stage of your life is when you are

work

ing, others depend on you and you are trying to succeed, then when you reach the later stage of life, the third stage of your life is others succeed without you. and that you are free and, according to Joseph Campbell, free to live and free to die, okay, so that you have that element of freedom, and so I'm at a stage in my life where you know I started with Bridgewater in a house of two rooms. apartment in 1975 and have taken it to where it is now according to Fortune it is the fifth largest private company in the United States it has been successful it has been good and my goal at this particular stage is to help others succeed without me I learned along the way along the way certain

principles

, not every time I made a decision I wrote down the reasons why I would make that decision and I published them, I debated them and I developed these

principles

, so think of the principles as just these reasons for making a decision if you are in this situation, how to deal with it?

It was also very important to me to operate in a very unusual way that seemed very sensible to me and is an idea that matters in a meritocratic way, so I want to describe Bridgewater as being an idea of ​​meritocracy, in other words, a real idea of ​​meritocracy that I will explain and show you. Such a real idea of ​​meritocracy where the goals are meaningful

work

and meaningful relationships. Meaningful work. I mean, you're on a mission you feel. We're on a mission together to do those great things and meaningful relationships, which means caring about each other, it's part of a community and being on that mission together and that was really good, great in terms of our success, but it was meaningful and meaningful work. relationships through radical truthfulness and radical transparency, which means literally having people say whatever they feel they want to say in terms of being polite, of course, but sharing what they really believe to be true and working to have a idea in a meritocratic way and literally record everything for everyone to hear, so I mean literally, they are a combination of videos and tapes of all the meetings that happen so that nothing is hidden because you can't get a real idea of ​​the meritocracy if you can't see things for yourself, etc.

It's a very unusual place and it was really the foundation of our success and I want to explain that way of operating to you because this idea is a meritocratic way where there is meaningful work and meaningful relationships through radical truthfulness and radical transparency so that you can have thoughtful disagreement and having ways to overcome that disagreement and then move forward as a legal system that has been the key to our success, so that's what I want to try to convey to you and I'm just going to take a few minutes to try to review some slides to give you an idea of ​​this.

You know I wanted big audacious goals. I wish you big, bold goals. Go after your goals and on the way to your goals you will encounter your problems and your failures. otherwise you just go straight to your goals, no, that's the learning process, you can, your failures, failures are part of the learning process from failures, what I found was great. I started thinking of failures as lessons. I started thinking of them as puzzles instead of developing emotional reactions to those failures. I think pain plus quality reflection would make me progress, so I started thinking of almost failures as puzzles that if I could study the puzzles, the puzzles were what I would do differently in the future that wouldn't produce that problem again when it happened. like that and then I would reflect well on what that was, those would be my principles, what I would do differently in the future, if I solved that puzzle, I would get a gem and the gem was a principle, a principle to handle it better in the future because failure is a learning process, it is a essential part of the learning process, if you can realize that and write down those principles, write them down, it's been fantastic, so we learn those principles and then it would help me improve and then I would move on to more audacious goals and I see the personal evolution, almost every evolution , evolution of a company and the evolution of everything as a constant loop process that I kind of think of as a five-step process.

In other words, to be successful you have to do five things. First you have to know what your goals are and go after those goals. Be clear about your goals and you will encounter problems on the way to those goals. Are you your barriers? It's okay, they are your tests now, don't just complain emotionally, think of them as if they were your problems. You have to diagnose those problems to the root to get to the root and that root could be yourself. what you're doing wrong or what someone else is doing wrong, so you can't customize it, you have to really analyze it to make those changes and when you get to that root cause, only by knowing that root cause will you be able to design a solution. way to get around that group because if you're not good at something, it's okay if you find someone else who is good at the things you're not good at, because no one can be good at everything, but you have to do it. that you can't keep hitting yourself against the wall, so you have to design something that is practical to solve it and then you have to go ahead and do it.

A lot of people come up with designs, but you have to do it. that is necessary and by trying again you will find out if you are reaching your goals or if you will face your next set of problems, etc., and I think that is the first personal evolutionary process that has helped me achieve that. rules that I was able to write and that you can get in these principles of this book. Oates is why I'm passing them on, although we were actually able to put those rules into algorithms and build decision-making processes that replicate the brain.

We'll talk about that in a minute. So to be successful in the markets, one has to be an independent thinker, to be an entrepreneur, one has to be an independent thinker and bet against the consensus and be right because the consensus in the markets is built into the price, whatever. thing that anyone thinks influences the price, so you have to think that you have to bet against the consensus and you will be wrong a good number of times when betting against the consensus, but in any case, you must be an independent thinker and , to be an entrepreneur, you have to be an independent thinker because you are inventing new things, you are doing something and you don't know if you are right, so in order.

To be successful I needed to have a group of independent thinkers to be effective. Well, how are you going to get this group of independent thinkers to agree on something? Well, I had to have an idea, meritocracy, in other words. I had to have a system that literally systematically allowed for thoughtful disagreement so that these meritocratically minded people could get to the right answer because that's fantastic, if you can have that thoughtful disagreement to get to the right answer, it's very powerful to have that and then by systematizing it systems of principles a system for having reflective disagreements about an idea meritocracy we could produce greater amounts of successes we also produced failures but we would look at it that way we would produce our learnings and that would produce as a result happy employees who really believe in this idea it was something meritocratic and it was owned of the company intellectually and otherwise owned the company and we had happy employees and then it became easier to attract those kinds of people, those kinds of people who believe you know everyone has the right to make sense of things. and that there is a power and thoughtful disagreement and that allowed us to attract more people and that was the basis for going from the two-bedroom apartment to Bridgewater now, so now we would have about 1,500 people and that's how it works as 90 meritocratic meritocracy and I want to convey that to you and I want to say, okay, so what is an idea of ​​meritocracy?

You could have your own versions of this, you choose what feels right to you, but it takes three different things for an idea of ​​meritocracy. everyone has to put their honest thoughts on the table to see. Now I look at this and I think there are so many organizations, so many people that they all keep it bottled up in their heads, you know? and they are critics behind the scenes and that is bad. Can you put your honest thoughts on the table with other people's honest thoughts so you understand what people think? Well, first of all it makes everything much more efficient.

It's terribly inefficient when no one knows what the other person is thinking. so it also doesn't allow ownership, it can't be an idea of ​​meritocracy if you just don't work it through everyone talking behind the scenes, we don't allow talking behind the scenes, but anyone can challenge anything at any time, okay then. You have to understand the art of thoughtful disagreement. Okay, thoughtful disagreement. Many people react badly to disagreement. You have to change your modus operandi and start thinking. It should be curiosity. How do you know who is right? How do you know who is wrong?

Okay, I should prompt you. Curiosity, not anger, tends to produce some anger because it is like barbaric animal behavior. What happens is the amygdala part of us has this flight or flight thing and then it looks like an attack, you know, and you have to do it, that's not good, so there are There are protocols that we have and I'm not going to address now that I don't have time, but they are laid out in the book about how you have the art of thoughtful disagreement to increase the odds because collectively you are going to achieve it.

You have an idea of ​​meritocracy and you know how to do this well collectively, you are going to make much better decisions than individually if you are just stuck with the information in your head and your opinions, that is terrible, I think One of the greatest tragedies of the humanity, something so easy to fix, are the people who are stuck with wrong opinions in their heads that they don't put into stress tests and don't say and increase their chances of being right so they are thoughtful. disagreement, you have to understand the other disagreement that brings with it a better thought than you have individually and has a probability of leading you to a better answer than you would have individually, that requires a skill and then you have the disagreement, your honor, that decision collective. doing is very powerful, it is well done, but you may still have a disagreement after those things that may arise, then you have to agree on ways to overcome your disagreement, if you have disagreements that bother you, etc., it is like a legal case a legal case is fine, you go in, you have a trial, you do it, you get it, but you believe that the decision-making system is fair and because you believe it is fair and you have had that opportunity, you can do that. you say that now we can move past the disagreement and move forward instead of getting stuck on it, so those are the three things that an idea of ​​meritocracy has to have, you know, and if you think you want an idea of ​​meritocracy, you have to think about those three. things are good so this is what meaningful relationships and meaningful working together has produced this success because and then this radical truthfulness and radical transparency, you know, produces an idea of ​​meritocracy, okay, the other thing is to to have an idea of ​​meritocracy and to be able to have great personal development here when you know what someone is like you know what you can expect from them well, can you talk about what people are like? can you deal with really understanding what people are like?

Do you know what you are like or what you are like? You're going to hide those things and not talk about them. Okay, people who want to get into this environment would like to honestly know what their strengths and weaknesses are and work on them so they can produce better teams. People who have some weaknesses can work. with people who have the corresponding strengths, are well and also know about themselves and are also very direct, then I can hand over that responsibility to you, but I can't hand over this responsibility to you because you seem to have these weaknesses, how do you objectively answer the question of whether you have those weaknesses or those strengths, can we do it objectively?

That's really great so this is an important element that has been fantastic for us and I'll give you an idea so this is just to make it clear that you know the qualities of a job. It takes then how someone is in the goal is to eliminate that, so I'm just going to give you, so now I use technology and algorithms that I started 25 years ago, and we have, and a huge degree of use. algorithms to take principles and put them into decision making systems, all of our investment decision makingIt's done by replicating our thinking and putting it into algorithms and taking data, and we do the same for about half of our management processes and I think we're on the path that we'll have algorithmic thinking, meritocratic decision making done by algorithms that can see everything. and that they can make better decisions than individuals trapped in their heads and because you can specify the algorithm so that everyone can see the algorithms, everyone can see the criteria and can evaluate.

The merit of the criteria, but to give you a little idea of ​​that, what I want to do is show you a little clip of one of the tools that we use and we'll give you an idea of ​​what we're doing. So who can watch the clip to give you an idea of ​​what it looks like? I would like to invite you to a meeting and introduce you to a tool called our point collector that helps us do this a week after the US election our research team held a meeting to discuss what a Trump presidency would mean for the economy of the U.S.

Naturally, people have different opinions on the topic and how we approached the discussion. The point collector collects these views. It has a list of a few dozen attributes. Every time someone thinks something about someone else's thinking, it's easy for them to convey their evaluation, they simply write down that attribute and the provider's rating from 1 to 10, for example, when the meeting started, a researcher named Jen rated me three, in other words, bad for not showing a good balance between open-mindedness and assertiveness as the meeting unfolded Jen's assessments of the people added up this way others in the room have different opinions, that's normal, different people They will always have different opinions and who knows who is right, let's see what people thought about how I was doing some people thought I did well others poorly with each of these points of view we can explore the thinking behind the numbers this is what What Jen and Larry said Keep in mind that everyone can express their thinking, including their critical thinking, regardless of their position in the company.

Jen, who is 24 years old and just finished college, can tell me, the CEO, that I am approaching things terribly. This tool helps people express their opinions and then separate themselves from them to see things from a higher level when Jen and others change. Your attention shifts from entering your own opinions to looking down at the full screen. Your perspective changes. They see their own opinions as just one among many and naturally begin to wonder how I know my opinion is correct. That shift in perspective is like going from seeing in one dimension to seeing in multiple dimensions, and it shifts the conversation from arguing about our opinions to discovering objective criteria for determining which opinions are best.

Behind the point collector is a computer that watches and observes what all these people are thinking and correlates that. with how they think and communicates advice to each of them based on that, then extracts the data from all the meetings to create a pointillist painting of what people are like and how they think and does so guided by algorithms that know what people are. For example, a creative thinker who is untrustworthy may be paired with someone who is trustworthy but not creative. Knowing what people are like also allows us to decide what responsibilities to give them and weigh our decisions based on them. the merits of the people we call their credibility here is an example of a vote we took where the majority of the people thought one way but when we weighed the opinions based on the merits of the people the response was completely different this process allows us making decisions not based on democracy is not based on autocracy, but on algorithms that take into consideration the credibility of people, yes, we really do this so you can see the credibility waiting, so let's imagine that you have data on everyone so that know that you don't walk in a room. and everyone has an opinion because and without really thinking with some element of scoring, who is more likely to have a better opinion because there is a certain dynamic that you put.

I don't put ten people in a room and you'll get one of two things. Either you're going to have an idea of ​​merit, or you're going to have autocratic decision making, in other words, everyone feeds their opinions and then the guy responsible for that says, "Okay, here's my decision based on that, that's it." more normal sometimes." I'll go around the room and what everyone thinks and then there's a notion of consensus and that's not so good either, which is the best thing I did because I really don't know if I have the right answer. I don't really run the company.

That's the reason I did this because it was out of necessity. I want to triangulate on people who I think might think better or and if three credible people believe one thing and I believe another, there's a good chance I'm wrong. and also what am I going to do, how, what happens to them, so I like to have these credibility scores that are accumulated through data and other people's thinking about who is better and worse at different things and then now you guys can change those scores or take them into consideration and that's what credibility-weighted decision making is because it helps the idea of ​​meritocracy.

Okay, that's what we'll do. We will go to the question and answer. The important thing here is to talk about the idea of ​​meritocratic decision making however we choose. do it and any tool that we use to get to that is really subordinated to the idea of ​​how you have that idea of ​​meritocratic decision making. I think what you're going to see is if you start to get to this main decision. -make an idea meritocratic decision making what you are going to see are paths that imprint the learning of principles to deal with situations that in themselves will be a meritocratic idea, so if you have a situation and you are going to search on Google to find out what the Facts are that now you'll increasingly be able to go to Google and find out how you should handle certain things, principles and things like that in that idea in a meritocratic way with credibility, considered decision making and things like that, so I want to leave that there and then.

We will have our conversation. I'd like to start with the other concept called using and how that affects our thought process and you can also get feedback. Can you talk about that? Mmm-hmm, well, the brain actually has many parts. In it are the things that compete with each other to make decisions, but the two great uses are the reflective you that is in our conscious mind and then the emotional you that is in our subconscious mind. There are many motivations that probably I don't even know are subliminal that come from maybe your early childhood or your circumstances that are below the surface and are at odds, fighting against each other, so when you think about the question of would you like to know your weaknesses?

Would you like to know what other people really think of you? It's fine intellectually. You would like to know those things emotionally. It may seem like you don't know those things. So when you're dealing with our environment and you say, Would you like to have this? In an environment of radical truthfulness and radical transparency, almost everyone says it intellectually and when they are going through it they say it and you also see them struggle with their emotional self as they go through it and until they readjust and when they begin to readjust . and they say knowing what's true is good and yeah, now I know my weaknesses and I know what other people think of me and I could address what to do about it, then they kind of transition to the other side, so we have that. our to use that leads to struggles like you know, disagreement, you know, disagreement and finding and emotionally difficult, that's curiosity, why shouldn't it be a joy, but we have that emotional thing that we have to fight with, so that's the use and what are some tips. that people can help themselves overcome the problem of use to be more resistant to feedback, well, you know, it's a series of things that are in the book first, first, I think let me answer before you go to that particular one every time there is a conflict.

I recommend that you go to a higher level, a level higher whenever you have a disagreement, just go to a higher level with the person you are in conflict with or even with yourselves when you have a dilemma and you look and come to an agreement on how they should be with each other; In other words, let's say you and I have a disagreement, okay, instead of getting caught up in the anger of that disagreement, go further and you should say how do we disagree? How should we disagree? Form a contract about how you should be with each other and turn it into a practical modus operandi.

That's what we do and then there are also the ways in which we do it, so the ways in which we do it are certain things that we must first consider. Know that decision making is a two-step process: first, you take into account and then you decide, the ability to take the other person's point of view, the knowledge, you notice how your body reacts, you notice how you are reacting. Am I getting my heart rate right? come up, can I take a break? We have something like the two-minute rule. Can I have two? Two minutes. Then that person has two minutes to say what they want.

Having those types of protocols. There is a number in the rule explained in the book where this. Curiosity where there is no blocking, you know someone in a discussion will do a lot to block the assumption, so I won't go through all of these protocols, but the protocols that have the protocols in place that you practice are fair. I have created an app called dispute solver. So when someone has a dispute, they press the button and there is a route in the dispute solver that is explained in the appendix of the book. All the tools are there and you are there and describe the procedure of what is done depending on the level.

Of the dispute, a very common thing is that if you and I have a dispute, then the simplest thing we can do is that you and I mutually agree on a mediator, yes, then we agree on a means and move on to others, it could be matters. of principle and almost goes on a large scale like legal cases what is your evidence what is this in who is the judge now when you have this dialogue and discussion about feedback and it could become a tense situation like with disagreement there are mediums of exchange that you prioritize because I see some people prefer email, but when you use it you lose tone, content and context.

As a generalization, we want the person to find the medium of exchange with which they feel most comfortable because each like has advantages and disadvantages. Some people in the moment feel that they are not as spontaneous in the moment or that they may be more introverted and think that they will not present themselves in the best light in a one-on-one in-person discussion as they never would. by email to say listen I would like to share my thoughts hear your thoughts by email and then have the opportunity to exchange opinions some people would like to do it in other ways the important thing is that they simply agree on what is most effective for them Excellent Now let's say an organization is going through a calamity and there is a trust problem in the organization, how does the company rebuild trust among employees?

Well, again I think radical truthfulness and radical transparency are the means to do that. I did what my experience would be if you had radical transparency, so literally every crisis I was in, every situation I was in, I would have a camera in that discussion as we went through the pros and cons of the issue so that everyone could see the pros and cons. the pros and cons of the discussion so you know there is no twist if you have a trust issue if it is hidden behind the scenes. I think with that radical transparency for everyone to see, just imagine what it would be like here, that's fine for any problem you have.

You could see how people make decisions by literally weighing the pros and cons and seeing how real they are, and it could be anything from the top of the organization to even someone firing someone else so they don't do it right. transparency and then coming out of that and writing principles about why you handled it that way and then publishing those principles so that everyone could debate that principle or look at that principle, not in a time-consuming way but in an effective way. then having an idea in a meritocratic way, when you look at it, you say, okay, that decision was made that way, maybe that's not the way I would do it, but now I understand the thinking behind it because if not you have that kind of thing, then there is alienation, if you don't have trust and you don't have appreciation, then you increasingly build an organization where there is an us and them, you know there are people who are making the decisions and you don't really understand it and You just have to accept it and then it becomes a source oftension and then there are factions and all that and there is no resolution.

You have to have resolve and get through it so you know that radical truthfulness and radical transparency build trust and It also means that bad things themselves are bad things that happen because bad things happen in the dark. It's true. If you make it radically transparent and everyone can mention it, then everyone owns it. Radical transparency is a very effective tool in terms of building trust and putting things in life, believe me, none of this is perfect, but it has certainly been miraculous for us, excellent, why do you think organizations are not moving towards transparency radical?

First of all, I think they inevitably will. I mean, you should know that it is very easy to collect. data on everyone so everyone knows what everyone is like and then the question is who has radical transparency and then what are you going to do with radical transparency are you going to make what you're doing with it radically transparent okay so I think that evolutionarily we are going to reach this, you know, radical truthfulness and radical transparency because it is going to be difficult to hide it. I think it's a control thing and at one point and it can be a control thing, it means you're a decision maker and all these people have all these different points of view and how meritocratic it is to hear all this and we'll never figure it out. those things you know someone just wants to get on with their decision making and I think that's because they're still in this mentality which I think will be an old world mentality is that everything is in the head, not instead of outside of head and in that notion of how to make the best algorithmic decisions so that it is not in the head, but we still have that it is in my head and I want to do what I want to do and I know better. and how do I do that, that's a big part of this and then thinking, of course, in the moment of how to figure it out with all these people so that you have an effective and efficient real-time way of coming up with an idea. meritocracy, those are the barriers and then there's this for you, okay, that's emotional, you're okay, those are the, I would say, the main barriers.

Now you said that what's important to Bridgewater's mission is having meaningful relationships. Have you discovered that with this transparency you have been able to? I guess leveraging the relationships that you've had in the company is a yes and I would just say we don't even have a yes, but we don't even have to go to the company level. I'm just saying that any group. of people can decide if they're going to be radically truthful and transparent and in the same mission thank you, we got five people together and they said we're going to be in that job and that's largely where it started because I started the company. and I say how am I going to be together because that honesty and being on that mission is going to bring people closer, it almost brings everyone closer, hiding things in the absence of trust is bad and not only the absence of trust, but you can't have real ownership If you don't understand and you don't have a voice you know everyone and like I say everyone has the right and obligation to make sense of things it's powerful and when you're in this together something much more magical happens than a paycheck and a job.

You know it now, when you have created your principles. Have there been processes where you said maybe this principle was working at this point, but now we need to read constantly because, like you, so do I? I guess I want to describe it. I think everything happens, almost everything happens over and over again, so we look at things as individual things that are coming up, so it's like we're in a blizzard, but if you just said, say what. kind of thing, what kind of encounter I'm having and you write a beginning for it and you write it down and then when the next one comes up you go back to see, ah, it's that kind and you go to that beginning and you look at it and they're all a little bit different. and that leads to the refinement of the principles and those differences, and then doing it transparently is very powerful, so yes, always and you realize, of course, that no principle is perfect, no principle works, so those different gradations develop further and become clearer. and that's what the book of principles is about, it's a bunch of these things and you'll see how they'll evolve from this encounter and that counter and you'll gain refinement and I would urge you to do it individually.

This is one of the most wonderful things that has ever happened to me, you know, when something comes up, some particularly painful situation, so it may indicate that you don't want another one of those after you get over your pain or in the end you record your pain and then think about the principles and write them down, how would you handle that kind of situation? Write it like a journal and when you accumulate them and share them, that is very powerful. I'm going to create an app that I'm not alone in. include that we have an application that we have as a coach and someone says I'm in this situation, what should I do and then they go to that coach and he says the relevant principles come up, but instead of just my principles, I will achieve it. let every successful person that I'm going to get know that I don't know my pages read look at that situation and say what should I do by going to those principles, because if you start thinking about it in the main way, it is very useful and will refine you now in the five. -Step process What are the five steps?

What do people have the most problems with? It's very interesting. It really depends on how their brains work. There are some real thinkers who have no problem with goals and know where they want to go. go but they have trouble driving results, so there are some people in terms of diagnosing things to the root cause, it's a challenge, everyone has a problem in one of those steps and we see that by looking at themselves in which step They have a problem. When they start to understand how their brain works, it is not a problem, although if they work collectively because in any step that they are having a problem, if you help them with another person, it can really help them to be effective in that step and that is really the key.

To be successful in life, the key to success in life really is, in large part, knowing what you're not good at and who can help you get good at those things so you can lean on each other and be effective. Excellent in the book you mentioned by Joseph Campbell. The hero's journey and what kind of impact it had on his work. Well, my son gave it to me in 2014 when I saw it very late in my trip, but he was at a particular point in my trip where he gave it to me and at the last stage of the stage.

Now I'm at he described returning the blessing and returning the blessing is the stage where you know you learned a lot and some people learn a lot and then they retire and he was pointing out that when you learn a lot you pass. he told it to the others and described it very vividly as: I don't like public attention, I don't like all that and, but did he describe it as you know at that last stage how important it is to pass on what you learn? He describes it as a difficult process and then when you do it so that others can succeed without you, you reach a stage where you are free to live and die because you don't have that obligation, so that's where he got me, but yeah you read the book it's very interesting or even in my book I told in a few pages what the hero's journey is and you start to think about where I am on this path, the hero's journey, if you probably don't.

I don't know the book of the hero of The Thousand Faces, it's Joseph Campbell's book, what he did was go through history and myths, etc., he says that there is a certain type of person who has a taste for adventure and goes through that, that's why and then they have their battles and they and the victories and defeats and then they then the mission becomes important and others become more important than themselves and they rise, we can call that spirituality whatever, but it is the basis of Star Wars, it was the basis of anyway, your book was like that, that's the notion of that journey and it's a good book, in my case I read it in that particular place, but anyone who refers to it will probably find out, oh , that's me, you know, one of the most important things was the abyss what is your abyss there will come a time when you are going to have a terrible situation and you are going to feel miserable and and how do you reflect on that situation and and if you have a metamorphosis a change A personal change in my case happened in 1982.

I was completely wrong and publicly wrong in the markets. I know if I take my turn to tell you the story, miss, but okay, you have the floor, oh yeah, so I formed Bridgewater 1975 and I had a you know, a small company and I analyzed and I had made calculations that the American banks had lent emerging countries much more money than those countries were going to be able to pay back and as a result we would have debt defaults and you know, in a debt crisis and that was a very, very, very controversial point of view and in that sense it turned out to be correct.

Mexico defaulted in August 1982 and I thought we were going to have an economic collapse, so I got a lot of attention. I was asked to testify before Congress to explain the situation. I went to Wall Street Week, which was a spectacle of the time, and I thought we were going to have this economic collapse that was exactly the bottom of the stock market. Not only was I more wrong, I was more wrong, I lost money, I lost money for myself, I lost money for my clients, I was so broke that I had to borrow $4,000 for my dad to help me take care of my family, it was a very painful moment. painful, but on reflection I would say it was one of the best things that happened to me because it changed my mindset from thinking I'm right to wondering how I know I'm right.

He gave me the humility to do it. balance with my boldness changed my focus I had a metamorphosis and so each person will have their own particular challenge in that way and what I'm saying is like in Joseph Campbell that abyss he describes that experience as here in the abyss and then you have the metamorphosis and that metamorphosis is something of a humility and I'm worried that you don't get it right and how do you get the best triangulation that motivated the idea of ​​meritocracy that brings the best independent thinkers to work? together, that's how it is, anyway it's a good excellent book, now we know a lot about your principles, but as for your father and mother, what kind of principles do they teach you?

Well, my dad was a jazz musician and he worked late into the night. He was a, you know what I think of him, he was a strong and capable man who I didn't see much because he played a lot at night, he stayed there, but in the later years we became closer and my mother You know that I loved to pieces. You know he had memories and many memories of her, so I was very lucky because I had a mother who loved me and a father who had a strong character and creativity. I mean, I remember.

At 80 years old he didn't let the snow get in his way, he went out and shoveled and he went through World War II and that kind of thing has never been known and he was a good man, so I had those role models and now You know, that's right, thank you and we talked about this before. You know, a lot of people don't have that benefit, so I had all this wonderful luxury of having a family and then I was able to go to a school I was a poet, you know, an average public school, but I was able to understand that a lot of people today don't have that benefit. that and I think that's a big problem, maybe we can transition there because we were talking about the psychological wealth of having a good family, but then there's an economic component and you've been talking a lot about wealth inequality and populism and I thought maybe you could talk a little more about that here, okay, yeah, look, this is not an ideological question, I just want to make it clear.

When I look at this, I look at its practicality and so on, and I'm dealing with economics and there's a mechanic that , as a result of this, leads to two economies, so they are hidden in the economic numbers, the averages if I want to enter LinkedIn I wrote two articles that you may find interesting on LinkedIn I divided the top 40% from the bottom 60% most of the people and I looked at what the economy is for most people and if you were to look at that economy, it's a terrible economy, it hasn't grown, it's the only population that has rising death rates from opioids and suicides, the biggest change in income, it's a bad economy and then there's this economy at the top and I divided it up. 60% could have divided 20 80 and the picture would be basically the same, not only in terms of utility and so on, mortality rates increase, this is all a phenomenon and comes as a result of several things, technology.

There are other things, but anyway that exists if you have rich and poor together and they live next to each other in the same community and they share a budget or they have to divide the pie and you will have an economic recession, you will have a conflict, you will have some kind of of conflict and, therefore, populism is an extension of that, it is not the first time this has happened, as I say, everything is another one of those. So in the study on populism which is also on LinkedIn, if you're interested in reading it, I looked at 14 populist cases and what a classic iconic populist case looks like and howthey work, and so that you can read about them, there was an iconic way of a populism so that dynamic of that disparity that problem that I think will be particularly important when we have the next economic recession which I think probably yes, I'm almost certain it will be before upcoming presidential election, which means I think there will be There will be a lot of polarity and I think it's a big problem so it's easier.

It is an issue of fairness and practicality that we have to deal with and that I would say should be. a national initiative I would say led by the president or someone where you take the metrics, I give metrics for that part of the population, you could look at the metrics and you, if you have metrics, are you getting better or are you getting worse and what does it look like? and then you have initiatives on how to deal with it. I think that economically we are not there, there are many things that could be done.

My wife is involved. I live in Connecticut. Connecticut has the highest per capita income in the country, but It is made up of rich people next to a lot of poor people and the averages exist and she works in the school system with what are called disconnected and disengaged youth. A disengaged student is one who goes to school but doesn't really study for the test. doesn't take tests failed is basically a failed and disengaged student is one who doesn't go to school doesn't even know where he is comes to school 22 percent of the students in Connecticut are disengaged or disengaged and and you look at the reasons for that and you look at the cost of what that means, the cost of there are programs and I won't go into this much, but I have their programs that maintain that help to keep children in schools and engage them that unnecessarily are not there and yet if they graduate from high school, incarceration rates completely change, crime rates change the average cost of incarceration is between 85 and 125 thousand dollars a year, so think about the cost to society, that is, what is happening , anyway, there are those kinds of problems that I think need to be looked at essentially head on, they need to be seen as a problem, there have to be metrics and there have to be processes in place to address it, yeah. and that's our biggest economic problem, if you had a magic wand and you could write down three policies that could be passed by our Congress and, you know, passed by the Senate, what would they be to solve this problem that's happening. now or do you think it's okay I finish again I think it's an idea meritocratic decision I think the big problem that I was answering before this other question before starting I think the biggest problem is how we handle conflict and how we have it and what are the principles that unite us and two great people that unite and that feeling that it is okay to work and solve it in a slightly less selfish way so that we do healthy things?

You know I would if we dealt with that. Another issue in particular, as I said, I would say that there should be a national commission and address what are the practical ways to address such problems and also clear metrics so that they take ownership of the results of those changes. Yes, after the publication of a period. I mean, we had this situation where the threat of World War II united all Americans for a cause and then after World War II it became social progress and I thought after 9/11 we had a time frame. where we came together but then it just collapsed, well, one of the things, let me be clear, one thing, excuse me, if you look at history, the history of populism is really a phenomenon of the 1930s and because that was the case, it you will see in this. piece where the wealth gap got bigger 1/10 of 1% top 1/10 of 1% of our population's net worth is equal to the bottom 90% of our population's net worth, so that polarity goes back to the 1930s after the depression. 1936 1937 and that led to Arab populism, many countries remained on this right and there is a kind of conflict and many countries elected a strong populist leader.

Strong leaders tend to be more confrontational, they tend to be more militaristic. they tend to be more nationalistic and that was that period in that period, interestingly enough, democracies chose to be autocratic and they became dictatorships because to try to bring order to them and one of the common ways to gather support is to have a conflict with an enemy foreign. enemy, so if 9/11 brings people together, a common enemy brings people together, that's a dangerous dynamic, not only when we deal with this, I would say it's more like we have to start figuring out how to deal with this. these common problems and try to solve them, you know more together, that does not mean not being tough, but you know how to be tough collectively.

I think I'm sorry for interrupting your question, but I think I just wanted to emphasize that particular dynamic. thank you, yes, I see people who identify more with their political party or their own identity and not so much as we are all in this together and it seems that we are fragmenting here in the country, is this whole idea something meritocratic like everyone throws I think this I guess who gives a damn what you think I mean, you know, uh, just because thinking that doesn't make it true all God because I think it's true, how do you work it out and get what's true? it's about dealing with that contract where we can actually have the rules for how to figure out what's right and what to do about it.

Thank you, now let's go into meditation, what led you to meditation and what it has done for you. The Beatles in In 1969, then they went, they went to, they went there, they went to India and they meditated and they came back and they sounded interesting and I started meditating in '96 and that changed my life. I recommend. I do Transcendental Meditation there to everyone. There are different types of meditation that I think have changed my life, they have been very powerful and it is probably the greatest gift that I can give someone because I will describe it to you, I guess briefly, it connects your conscious mind with your subconscious mind and gives you a equanimity and a creativity that you wouldn't normally have and the reason he does it mechanically the way he does is because he has a mantra, which is a word that means it has no meaning, it's a sound. like you know that a popular one would be yours, so you repeat it with your breathing and that means you get rid of your thoughts because if you sit there and say, I'm going to try not to think, you can't do that, the thoughts just jump out and to get rid of your thoughts you go to this mantra, you repeat it again and again and when you pay attention to that you cannot be thinking about something and finally the mantra disappears and you are in a subconscious state and when you are in that subconscious state you are not conscious or unconscious, you're in your subconscious state and that's where it's relaxing and it's great and it gives you that equanimity, but that's also where creativity comes from because you know no, you don't exercise creativity, you don't say, I'm going to work there, you become creative. , it's more like relaxation, pee, take a hot shower and you come up with this great idea so it bubbles up from your subconscious and therefore enhances creativity and I would also say one of the best things one can do is smash the reconciliation of the subconscious emotional self with the intellectual self because if you can align those things, they work both ways.

You're going to make better decisions, so meditation has given me that kind of equanimity, so I look at things um, you know things that maybe I wouldn't want to happen, but I can approach them calmly and better, so it's a big deal, It has been a big problem for me. It has helped you analyze your emotions and the heat of an argument oh yes, it helps you go above yourself and your situation and you know that look oh, there are rays and there are the circumstances that You know and there they are, I know. This happens this way and it's fine, so what should be done right?

Because if you're in that, if you're in that blizzard of things coming at you and you can't tell, you know what kind of thing it is, what the principle is. higher level, how should I deal with it? You know you're going to be on this or you're going to be above him on more that principle, looking at him and me and that level and it's much better to be at this level and then go in and do it, that will help get you to that level. Have you ever found yourself? I find myself in that trap where I'll start meditating and I'll start feeling so much better and good and I'll be like oh, I don't need meditation anymore, so I'll stop.

It's been so long for me that what happens is that I feel good when I meditate. I mean, I can feel the difference. I could say I need to go meditate. You know, it is. That refreshes me, so it's always good, it always feels good, yeah, and that's also been an advantage when you're in the investment markets, when there's so much noise around you, it allows you to understand the family circumstances, whatever they are. be. everyone has those things now since the book came out, whatever your thoughts were on the reactions to the book, did you expect it?

The reactions are as they currently are. When in 2010 I started getting unwanted pop attention, then I posted what our internal principles were, oh, and it was downloaded. It was just a PDF file and it was downloaded three and a half million times. Then I received many thanks. I posted it so you would understand and that's the problem. To put the book down I'm, like I said, you know, half of me, including, I should be a much more private person. I published this book and then I decided to go on social media to try to explain and interact with it and I found It's just wonderful, what I'm finding is that I get funny, it's having a big impact, people are giving me, you know, thank you, they are asking questions about it, it is having the desired impact of conveying what I want. and I'm actually really enjoying the interactions on social media because it has a certain personal 'no sivan' to it, although it's impersonal, so I know sir, it's good, I feel good about it, great now the apps you mentioned.

In the book, when do you plan to release them? It's a bomb. I don't know, six or nine months or something like that, when they're all ready. Yes Yes. I would like them to be available to everyone. Excellent, so let's take it. questions from the audience now, so if you have any questions, go ahead and grab the microphone. Thank you very much for coming. I really enjoyed your comment about the kind of secret of life and I like finding your blind spots and when you talk about that it reminds me of like our own oxygen project and we talked a lot about a lot of the same principles that you have in terms of decision making, So how do you approach that?

Because I think one way to approach it is through diversity. Sorry, it addresses what finding the right blind spots, so I think instead of using consensus as a way to measure credibility and correctness, so how do you balance those two things, like everyone having a consensus on an idea? instead of making sure you have a truly complete idea? variety of opinions, okay, what you want are the smartest people, the most credible and proven people who will then disagree with each other and disagree with you about what the best path is. Do not confuse the consensus, since everyone does not fail. make the mistake of thinking that a lot of people have valuable opinions when they may not, so try to get to the most valuable ones and try to identify them, so if you're going to do it, yeah. medical problem and you think okay, what should I do about my medical problem?

You know, you don't want to ask, you're just your friend, you want to know who the most credible people are who will disagree with you and each of them. others for you to find. I gave the health case there in the book about oh, can you find this doctor, you find that doctor and you think about who's arguing, but one of the best ways to go through this kind of triangulation is if you get really capable people who They will argue with each other if you have the triangulation on what to do, that will probably give you a good indication, well, that might be the right thing and you will learn, and when you don't have triangulation That's where the learning really gets interesting, because if you hear two sides of an argument and you listen to the debate you're going to and then you ask your own questions, etc., you start researching and you get a richer understanding of the topic. once you could have done it and then you can get to that level and get it, so I'm not discussing consensus decision making.

I am arguing the credibility of considered decision making. Credibility-weighted decision making means finding out in a number of objective ways in a particular community who would be more trustworthy and not, and then all going into the room and making credibility-weighted decisions, which is the most effective approach, so I don't know if I have answered your question. I guess it's difficult because of subjectivity. It's and I think especially in this era of similar social pressures, I actually think there's a time that is used three, there's the ru and then there's the intellectual you and then there's the time of the pressures of who should we be right and I guess It's hard when you have something subjective, how do you know it's something that's good?

Well, the first thing you have to do here is say: do you wantfind out? How are you going to create your idea? Meritocratic decision making. Won't you compromise her? Because if you are convinced that you should operate this way you will find the solutions, okay, you probably are not, almost everyone is not really on that path, just tell me it is difficult, okay, if in the book I am giving you a structure of, literally the things that we're okay, there's a lot of things that you can go on and on because you said I can't compromise that, but as long as you're going to keep saying that people say it's going to be difficult to behave, idea of ​​meritocratic decision making and having thoughtful disagreements and doing these things, decision making weighted by credibility, you won't have it and you will be losing competitive advantages, will you too? in your gut you really need it you really want it that's the most important question to answer I think it seems like you base that value on wanting that truth and that's how you feel comfortable with this credibility metric it's dynamic and rigorous figure it out figure it out and get the one objective next person okay thanks for your book I listen to it actually audiobook version your voice is very funny ah one of the things about transparency that you talk about you argue that it is great to have and you gave only one exception that stung me when I read it or I heard, it was sharing employee compensation information and you gave arguments for why that wouldn't work, but you could use the arguments for transparency. against that, so I was wondering how you approach that.

Well, first of all, you know everyone does it on their own, then there's no type of you that you know of. I do it one way. Many questions you can ask in one way. You could do it another way. and who knows exactly which way to do it and sometimes I tell myself that if you fight so hard about which way to do it and you fight to achieve it, you could probably just flip a coin and decide because there are probably equally good things. So the question we're asking is do I make everyone's individual trans compensation transparent and the reason I chose not to do that is because I discovered that and instead leave very clear metrics and levels of compensation by groups of people instead to put names to that so that everyone knows if you are doing well with that generalization, you know where the compensation levels are for others and the reason I did that is because what I found in the discussions is an evaluation of What is that guy like? doing with other people and that was not good, in other words, if you suddenly say that you know that Harry is earning this amount and now I have to describe my relationship and how I am evaluating Harry and now you will be the judge of how I am evaluating Harry.

Harry and all that kind of stuff and that's not something that you're going to be able to be good at and we shouldn't do that where I can just in terms of compensation either, so I'm radically transparent. The message I end the conversation with that I want to hear is do you want to be radically transparent? I don't want to make sure we don't get into one of those things exactly about how radically transparent it is, because I don't really care that much about that, doing it either way is fine, but how are you doing with the general concepts I'm talking about? ?

Okay, what about the recording? What's up with those kinds of meritocratic ideas? Those more important problems because like the question. before, okay, how do we do it? Well, the important things that we might struggle with here and how you choose that individual thing. I'm just describing how I chose it and why I just wanted to get your perspective on how you see your type of organizational principles being adopted more widely and in more different organizations in particular. I think you had the relative luxury, I would say, of being able to let the head of your organization design the organization; you know, operate according to those principles and say effectively.

You know, if you don't like the way our principles work in this organization, you can get lost, right? Most of us are not in that position. I was wondering, you know? Do you think these principles are more widely adopted by people starting organizations that operate according to a set of principles from day one or do you have any advice on how those of us who were more at the bottom of the hierarchy can influence the things at a more local work group level? Very simply, I think those people who have the ability to control their organizations will consider this way of operating and, as you say, the business people, the people who can do it will make their decisions and I think I know I'm having an effect on that. and that's helping, but that's good and then, but the people who don't, then we'll start to think about the options that they have as to where to work.

You can come to some environment that has a more meritocratic idea and another that has less of a marriage group idea. and you have a lot of options and for people who run organizations that is also an attractive thing to be able to push and attract those people, you have to know what your personal values ​​are for me, like I couldn't work in a place that I didn't have the opportunity to make sense of something if you know like those young people who criticize me that's how it must be to be able to do that and I couldn't work there it's for me it would be like eating I couldn't do it well so it's a personal choice if you think that is important, then you will gravitate towards organizations that have more meritocratic ideas and evolution will take its course.

The money was both in the entrepreneur and in the people who do it. answer a question online very fast measurement is an important topic in your book, how do you approach measuring equipment whose work only has second order effects, for example the aesthetics of the product, or that prevent bad things from happening so as not to have counterfactuals? I mean that in each of these types of questions where there is a particular dilemma or problem to solve, you start with a mind or a group of minds thinking how can I solve that problem and do it in a meritocratic way. you are the best answer to solve that problem and that is the most important thing, so when I am asked that question, I could give my particular answer to the question, but if I only gave my particular answer to the question, it would not convey the fact. that you have the power individually to do that anyway, then we all face that question: how does the group work? and when you have a group and you take the second order consequences and how do you know the decomposition of that, well, we can take a little Try the ideas of the children of the absorber here and say, "Okay, now we have to figure out the best way to do it right and then we can put together those better ways and find the best way and that's the way now. path, if you understand that path, you will arrive at the best way that you can arrive and that is better than the ways that you have and then it becomes clearer, so in our particular case, there are a series of evaluations that are very clear evaluations that the people do credibly about all dimensions of that, so sometimes you can't measure them, sometimes you can measure the results directly, in other words, you can measure someone's batting average or something equivalent and sometimes you can need a critique if we are asking if someone sings better than another person, there is no quantitative measure for that type of measurement to see that, but we could say that they are critiquing so that such measurements can occur at all levels and so that you know that We make whatever measurements we create together and we think it's okay, they are good measurements, we can create metrics about it, things as qualitative as I said, give the example of populism, well, how do I measure that populism happens over and over again? time?

It's a qualitative thing, but I could start creating that process. I found that, in general, almost anything I can think of I can express in an algorithm and a rule. The real question is how to arrive at that good rule. Excellent, thanks for talking to us today. Sir. Dahle Oh, my name is Max and as I thoroughly enjoy reading this book, one question I keep coming back to is evaluating the right time, because we don't operate in a vacuum to make the right decision. It's one thing to know how to be radically honest when giving feedback, but how do you evaluate the moment in which you give that type of feedback or arrive at that or execute those decisions?

You know well that there is a chapter in one part. about decision making, there's a section on timing, actually okay, so you can go to that section on timing and you know in general, but I do think you're also asking for the right time for feedback, if you're asking for time for The feedback moment, I would say it is practically continuous, so what I did with the point collector is give everyone feedback from each other and make people go further. That's happening continuously every moment of the day, so people have a you know. 360 review continually by a lot of people all the time, so then you could step back and see the patterns, you can look at it daily if you want and you can step back and see the bigger picture, but it's really very advantageous. doing it continually because you can connect it to the specific, in other words, a lot of times someone will give you an evaluation and there are a million annual reviews, think about an annual review and how silly that is, you know that, I say, okay, now I'm doing these things but you can't connect it to the specific by being able to connect all the time to the specific.

You know you can look back and consult with other people. Say I handled it this way. What do you think? so what, and you can make that very tangible, thank you. I will ask you about the organizing group or decision you mentioned, that you want disagreements to be discussed there. I wonder if we spend too much time persuading each other to graduate from this discrimination. Take time to reach consensus in the group and miss the opportunity because we took too much time in group consensus. Well, there's one in the book. If it is from left to right, you are talking about a risk that could exist.

It's expressed in the book about how to do that so that it doesn't do that, so I and there's a completely different way, but the important thing here is to quickly explore that notion of how you should make the decision because I think since everything happens over and over again. In a particular case, if you come up with a very clear way of how to make the decision effectively, you will be able to overcome it. I find that the inefficiency of organizations where people argue incessantly and don't What I can't solve is that you know it's a terrible thing, but you need the protocols, you need the tools, thank you.

I'm going to answer an online question very quickly in your book. You talk about making decisions as calculations of expected value. I find estimating profit to be a much easier task than estimating the probability of success since people are generally bad at estimating probabilities, can you share some techniques that you have found to work well? One of the things I found valuable was that if I write down my decision, I discard it depending on the nature of the decision. rule I can test how it would have worked in the past and get an idea of ​​it, like in my investment decision rules that I have.

I say they have to be timeless and universal, that means I try them from 1900 to the present. all the different countries and being able to specify them allows me to get an idea of ​​the distribution of those types of probabilities, some things are qualitative and they are different, but I think being aware of what I was describing in the book about how to think about that The probability that you know and the classification helps you in some things. I know it's just the mind that has to do and, triangulating with others, I think in my business, you know, I tend to think about that probability of decision making because I also have one of The benefits that I give are very clear, pay but rewards, you know, I get graded every day essentially on performance, you know, wait, hello, so after reading the book, I definitely agree with you that having principles is a good thing and they. help you spot another such situation, but one thing I didn't see covered in the book and am curious to know is at what point you decide that you've seen enough situations to need them. a director, you know you could have a beginning for every event you see, but then you could be over-adapting there, on the other hand, you could wait until there are too many of these, at which point you're probably over-generalizing, so I think what I think what happens, my experience is that it's like something big comes along and you start there.

Well, now you have the same thing. So what you know. Okay, now you're doing it and now another big thing comes along and you have one for it. and if you do that, you'll find out if you're getting two little things, but you probably won't have trouble with the little things because you'll have trouble with the big things, so I don't. I don't know, you know, I don't know, I don't have any principles even in the book, actually, but every few hundred and the reason was becauseneeded each one, what you find is when you come across something again, then you start doing it. a sub-principle like another principle, you organize them, but the way I did it was I wrote them down on paper first, but then I started dropping them into the BlackBerry when I was thinking and I would take those fragments and I would compile them just your thoughts, so start When collecting them, make sure you do it with the most important ones and yes, do not do it with the entire size of the event.

Thank you. I think the decision-making process in conflict resolution that you're talking about makes a lot of sense, but I wonder if a precondition for that is that the group agrees on the overall goal, even if it's not how to do it and to That works well, you know, in Bridgewater here at Google, but in you know the public policy realm, I'm not sure how it works. These people represent different interest groups and fundamentally have a different objective. Do you see any modifications that are necessary for that case? I think what you know most are all relationships.

The beginning is to define how you are. we're going to have clear rules between us, yes, so Bridgewater's rules are different than Google's rules, which are different from the government's rules. Then, within any organization there are subgroups that can decide how we will behave toward each other in a way that does not conflict. So I would suspect that I don't know if he was president of the United States. I would have an idea of ​​a meritocratic way that could be different than Donald Trump has, that could be different than someone else has, so that you within your group can decide.

OK, we want to be an idea, are we meritocratic? Can we talk about it? these things this way. we want to be transparent. I will make those types of decisions. Thank you, mr. Defrost, thanks for sharing my question refers to the points system you mentioned correctly, so it seems that you have correctly calculated the credible score for a person all the time collecting information to help you with the digital creation process. Has your system of thought been proven wrong? You figure, let's say someone's bills are very low when they've been shown the whole time, actually, this person is very credible in this, that's been Shawn, but I think the way I think about it is more than the way in what you are. semi describing it, if over time it is proven wrong, misquote, that must mean that you have evolved to the point where you believe that verdict to be reliable, so the evolutionary system must have gotten you to that point just as I did.

I see. It is with the size of the sample and with a lot of consensus or processes to create those algorithms, you have an evolutionary process, more data, more processes to arrive at the definition of what is true and then it is that mechanism that is always constantly evaluating so that There are statistical ways of measuring for a group as a whole how accurate it is, you could have something that could be something as simple as you would, like you could test how you know math and that could be an objective measure in some areas where You can I don't have much objectivity in some notion of creativity, but you will have different measurements, so the point I am making is that you are constantly never good enough and you are constantly evolving into something better and that is the best. way compared to other ways that don't do that and is there a plan to open Soulstice so that the system can be shared and used by many organizations?

Yeah, I'm going to release that, as I say, and people to make it open source so that people can write their own algorithms and agree together what the best algorithms are so that we can make that evolution and as I say, I probably don't know how many months, but maybe a year or so in the future. line, thanks, question for me, well you're talking about the process of evolution, sometimes it can feel like a shot in the gut over and over again, what do you do to feel good? You know that this is fundamental and is a product of my work, but no. critical like me as a human, there are some practices that you use, I think I think it's critical for you as a human, I think how you are and knowing what and if you can get to the point where you say I really know. how I am and now I can objectively deal with it to get what I want, that's a fabulous power if you're trapped, it's a tragedy that I'm weak at this and what I don't I don't want to know about this, you won't get anything you want , so I think it's a personal thing, just like a business, work, things think, I mean, it's just doing that, I raised my head and asked.

Raise your hand, do you think that makes sense? Yes, sir, yes, if you raise your hand, okay, great, thank you very much for coming. I started reading the principles PDF that was published a couple of years ago and I'm happy to know that you've published the book these ideas about radical transparency in the workplace have been I think getting closer to the cultural zeitgeist of the times really good your principles have made you a lot of money you have had a very successful career and that is incredible so my question is when do you think about your principle of how you have chosen to spend your time since you could have retired many years ago.

I'm curious how you thought about that and you know, in terms of right now, I think you're using your time to promote. These ideas of principles, decision making and radical transparency and I think they will hopefully have a big effect on companies around the world, so I'm curious if my wife chose to do it now instead of before and, in Overall, I like the way you think. because you haven't needed to work for a long time and I'm wondering why you still choose to keep working and what you think of Spanier. Yes, first of all, I'm not saying anything that what I'm doing is the right thing to answer your question, it's the right way to do things, I'm just saying it's for me the way I'm answering your questions, how do I do it?

I have been playing the market since I was 12 years old and I love it and I will play them until I die. I look at the economy. It's simply a game. I love it. Okay, but I saw it several years ago. If you take a step back and look at yourself from a higher level. and you take where you are, your age, where you are in this cycle when I turned 60 and then, and so on. I recognize that it is my responsibility to make a good transition to achieve this, you know your parents, you think about your parents and yourself, it is the same dynamic, okay?

Do they transition well so that you are fine without them? It becomes almost an instinctive kind of thing and these things come to you in terms of withdrawal like: I love my game, I love my mission, etc., but it turns out that there are In fact, it is a great pleasure to have a Sesa tea for others to beat me . I have participated, I have fought battles. I have won battles. I've built it up to go in and fight another battle and then I could go do that, but that's not the most. exciting and necessary thing for me, the most exciting and necessary thing for me is to transmit those things and that is what I have to recognize as my responsibility and just as I described it when I was at Joseph Campbell and I read this it says that it is totally okay, peace , peace for your parents will come when you are fine without them and everything is fine.

That's true, so it becomes instinctive for me. I like to retire as if I had never seen. It's like that because anyone would work like that I just want to have fun I just want to have fun I'm curious I want to do a lot of things I'll be curious and I'll do a lot of things like a million things to do I didn't want to run my organization anymore. He wanted to have that culture, pass it on and be successful without me and I was able to transition it to others who will then lead it.

I am president and I will continue to do the job. It is a question of investment, but anything that motivates you by free choice and not by obligation. I don't want to be obligated. Obliged. It is also a sense of responsibility. So I want to manage my responsibilities too and then be free of them. Those are the things that motivated me oh, thank you very much. I'm going to do a round of questions online. How do you address the paradox of tolerance and organization while striving for radical transparency? There may be some people who argue points of view that undermine open discussion.

Well I do not know. knowing what the points of view are that undermine open discussion, what the merit is and finding out what, what, what, how, why you wouldn't have that open discussion. I don't understand, maybe it's at a limited time, is it something else? I have to see what the impediment to open discussion would be. I'm interested in reading the book, but I'm just curious what your credibility score is. Well, I have the highest credibility score of all the guys, but it depends on what. We rate different levels of credibility for what, so I'm referring to the overall score.

Okay, that's not determined by me, but it's determined in other ways anyway, that would be objective, but if I take a bunch of areas, you know a lot. worst credibility scores, there are many that have much higher credibility scores in different areas, so you have around 60 different credibility scores. Thank you for sharing all the principles that you have acquired throughout your life, so thank you for that, my question is a little off. topic and I don't know if I'll have another chance to ask this question in person, so I'll ask it anyway. I am a firm believer in value investing and my beliefs were formed by reading books by Ben Graham and SETI Klarman, but I recently read David Swenson's book and he mentions that the biggest determinants of portfolio returns is not stock selection but capital allocation and I'm wondering what your take on that is because I think what you're referring to when you distinguish stock picking, you're referring to the individual securities chosen within an asset class, as opposed to the differences.

When you say capital and allocation, you are referring to the different types of asset classes. I guess that's what you mean. that way and that is correct, in other words the average stock is 60% correlated with the average of other stocks that you know so there is a high correlation of stocks that will go up and down together and because of that, It will almost pass. a certain point it doesn't matter how many stocks it's just a few, I cover it by the way in the book in terms of the math of literally how if I take something that has a 60% correlation and I put more than 10 on the marginal benefits of diversification or practically zero, so you'll have the stock market or something and then some alpha is the deviation relative to that, whereas if you have a limit for one asset class, different asset classes will behave very uncorrelated with that and so capital allocation-based portfolio construction, as he calls it, is very important in terms of saying what's really the key, most importantly because of the nature of the correlations of those pieces to achieving that balance.

Thank you, thank you for the book, it's great. Bridgewater's two-year economic outlook for the US? I think we're going to stimulate a lot of earnings growth, we're going to stimulate capacity constraints and that will raise interest rates and then there will be a sensitivity to those changes in interest rates will put the Federal Reserve in a particularly difficult position and others central banks around the world in a particularly difficult decision, so I think probably as the year progresses we will start to see the question of how interest rates or Federal Reserve policy affect the markets in general and when will become negative, when is that a problem because we are reaching the end of the cycle, at the end of the cycle there is a cycle and there are capacity limitations and stimuli and as you move towards the end of the cycle, it is never the Federal Reserve, it is never the central banks They never get it exactly right and that's why we have recessions, we always have recessions, you can't take a ramp plan away from them when that balancing act becomes difficult.

That balancing act will become increasingly difficult later this year and early next year and will probably manifest itself in market behavior and then in terms of the economic slowdown, because we always have them, if you know. probably maybe later on, you know 2019 or something like that, but I can't be, you know it would be something like that. Thank you, thank you for coming. I appreciate my pleasure, clean presentation. One question I had was: I know the bridge. Waters has been producing investment thesis for wells since the beginning and investment what is the thesis, yes, yes, Bowles, yes, mm-hmm, to what extent are you willing to do it and maybe this is a request more than any other stuff?

Are you willing to open them too? possibly previous ones and previous examples. I made a 30 minute video called how the economy machine works. If you haven't seen it, people think about it and exemplify how I think it will be useful and not harmful to build water bridges for transportation. economic principles and market principles in general, we won't get into our exact algorithms that, you know, we would say would diminish our ability to do what we do well, but they will be, you know, I'm writing a book on economics and investment principles, would you?will you know?

I don't know, it could be about 18 months, I'm looking forward to it, thank you, thank you Ray for joining us. I think there were three, you know your schedule, I'm the boss, do it offline, but thank you so much for joining us, who really appreciate it. You wrote an excellent book and I hope everyone goes and understands it. It becomes phenomenal. Let's give you Ray.